The Portland daily press., 1887-07-20

they could make S4S0,000 out of the DEAL
In October, 1885, Mr.. Sinclair induced the city
of Nashua to sell to him 1920 shares which it
held. He had to pay full par value for these,
800 share. So Mr.. Sinclair and his asso-
ciates probably held at this time about 10, 400
shares. Then there were 1905 shares which
they found in the treasury when they came
into power as directors This stock. Mr..
Sinclair, as he says in his testimony. took
in November, 1885, and divided up a large
part of it as a stock dividend pro rata among
the stockholders. For every 100 shares held
by the stockholders, he gave seventeen
shares of the stock from the treasury. He
and his friends held at this time. as his testi-
mony shows, about 1920 shares. For every
hundred held they got dividend of II from
the treasury, or in all they got over 1900
shares, which at the par value paid for the
shares then but recently bought of the city
OF Nashua, represented about $4,000. But
here some Of the bond holders objected that
1t was not lawful to divide up so much of the
company's stock among the stockholders,
and they talked Of getting an injunction to
stop 1t. So these bondholders had to be
quoted, and TO do it Mr.. Sinclair aud his
friends bought their bonds, giving them 20
per cent premium, or some eight or nine dol
lars above the market price on each bond.
For bond that was selling as high as ITO
they paid 100. TO keep every one quiet they
had to buy great many bonds, but they did
it. and the stock dividend was made. This
dividend doomed the stock of the Worcester.
Nashua and Rochester up to $f30 share. This
good luck continued. TIE Boston a. Maine
in 1856 offered to lease the road, paying for
it S250,C00 year. Out Of this the fixed
charges of the road can be paid, with enough
left over to pay 81 per cent on the stock I'm
der the happy influence Of this lease the
Worcester, Nashua aud Rochester stock set
tied down in June, 1856, to good paying in
yestmeni, valued at $l2O share. Before the
stock was bought of the city of Nashua i.
appeared that if Mr.. Sinclair and his friends
could sell ont at par they could make on
there 12,C00 shares about $4S0,O00. But in
1886 they could sell at 100, which would make
the aggregate value of there I2,0O0 shares,
$1,440,000. Estimating that they bonght at
$50 share, and they probably did not pay
much over, they must have doubled their
m0ney,or made between sevenIand eight hun
dred dollars out of their deal. This estimate
does not include any profit made out of the
rise of the stock bought of the City of
Nashua, which seems to baye risen from 100
to 100 in their hands, nor does it include the
expense incurred in buying bonds at rate
above market price to quiet bondholders who
objected to the stock dividend Probably
the two transactions would about offset each
other.
Thus, IL Mr.. Sinclair told the truth in his
testimony, it is evident that we have in the
transactions over the Worcester, Nashua and
Rochester railroad an excellent Illustration
of the manner in which fortunes are some
times made in the railroad business. The
booty from the transaction seems to have
been enormous; of the methods it is enough
to say that in one move, the payment of the
stock dividend, the laws of Massachusetts,
seem to have beeu openly violated.